Marquette University
e-Publications@Marquette
Economics Faculty Research and Publications
Business Administration, College of
3-1-2012
Examining Megachurch Growth: Free Riding, Fit,
and Faith
Joseph P. Daniels
Marquette University, [email protected]
Marc von der Ruhr
St. Norbert College
Accepted version. International Journal of Social Economics, Vol. 39, No. 5 (March 2012): 357-372.
This article is © [2012] Emerald Group Publishing and permission has been granted for this version
to appear here [10.1108/03068291211214217]. Emerald does not grant permission for this article
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
accessed by following the link in the citation at the bottom of the page.
Examining Megachurch Growth:
Free Riding, Fit, And Faith
Marc von der Ruhr
Department of Economics, St Norbert College
De Pere, WI
Joseph P. Daniels
Department of Economics, Marquette University
Milwaukee, WI
Abstract:
Purpose – Megachurches are thriving in religious markets at a time when
Americans are asserting their ability as consumers of religious products to
engage in religious switching. The apparent success of megachurches, which
often provide a low cost and low commitment path by which religious
refugees may join the church, seems to challenge Iannocconne's theory that
high commitment churches will thrive while low commitment churches will
atrophy. This paper aims to investigate this issue.
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
Publishing, Ltd. and permission has been granted for this version to appear in e-Publications@Marquette. Emerald Group
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
accessed by following the link in the citation at the bottom of the page.
Design/methodology/approach – This paper employs a signaling model to
illustrate the strategy and organizational forms megachurches employ to
indicate a match between what the church produces and the religious refugee
wishes to consume in an effort to increase their membership. The model
illustrates that megachurches expect little in regard to financial or time
commitment of new attendees. However, once the attendees perceive a good
fit with the church, the megachurch increases its expectation of commitment.
Data from the FACT2000 survey provide evidence in support of the model's
predictions.
Findings – Data from the FACT2000 survey provide evidence in support of
the model's predictions.
Originality/value – The paper serves to illustrate the dynamic process by
which megachurches attract new attendees and transform those that find a
good fit between their needs and what the church offers into full members of
the church.
Keywords: Megachurches, Quality signalling, Religion, Organizational
analysis, United States of America
I. Introduction
Megachurches are thriving in religious markets at a time when
Americans are asserting their ability as consumers of religious
products to engage in religious switching. Survey results from the
latest Pew Forum on Religion and Public Life (2008) study of the US
religious landscape find that religious affiliation in the US is very
diverse and extremely fluid. Kosmin and Keysar (2006) find that
individuals are not only increasingly changing their church
membership, but also their denominational affiliation, or deciding not
to attend services at all.
The increased trend of religious switching allows some churches
to gain attendees while others lose attendees. In the five years
between 2000 and 2005, the number of megachurches in the US
doubled, growing to 1,250. At the same time average attendance at
megachurches grew 57 percent, from 2,279 to 3,585 (Thumma et al.,
2005). Taken together, these facts suggest that megachurches are
successfully competing with other churches to attract and retain
members.
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
Publishing, Ltd. and permission has been granted for this version to appear in e-Publications@Marquette. Emerald Group
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
accessed by following the link in the citation at the bottom of the page.
This paper examines the seeker‐oriented megachurch which
have recently grown in number and often come to mind when
megachurches are discussed (e.g. Bill Hybels Willow Creek Community
Church in Illinois or Rick Warren's Saddleback Church in Orange
County, CA). Seeker‐oriented megachurches typically target religious
refugees, or seekers, in order to grow. These individuals either were
never members of a church, or were members of a church but for a
variety of reasons no longer actively affiliate with it. Some do not
attend services or participate in other ways, but maintain an affiliation
in name only, while others have switched to identifying with no religion
at all. Warren (1995) deliberately built Saddleback by targeting
seekers.
Iannacconne (1994) employs a club good model to describe the
success of relatively strict denominations. He argues that the
satisfaction an individual receives from participating in a religion is, in
part, a function of how much other attendees also participate. He
makes the case that strict churches (churches that require significant
self sacrifice or stigmatization) enjoy a competitive advantage over
liberal denominations by minimizing free riding. The logic being that
those inclined to free riding would not attend a church that has such
high expectations of active engagement with the church. As a result,
strict churches will create incentives that promote full participation
among its members, thereby raising everyone's utility.
The success of seeker‐oriented megachurches, which typically
have low commitment expectations for newcomers, raises the question
of what strategy they employ to attract and retain these seekers while
still fulfilling the needs of members who have a deeper connection to
the church. This paper evaluates a potential strategy megachurches
may pursue to signal the high quality experience they can provide to
seekers. It suggests that the church requires little of seekers in terms
of time, effort, and donations early in their affiliation with the church.
This allows the seekers to attend services anonymously as free riders,
providing them an opportunity to see if what the megachurch offers
fits their needs. It also suggests that after the seeker consumes the
church's religious product and discovers a good fit, the church can
then increase its expectations and require more time, effort, and
donations of the new attendee, thereby reducing on going free riding
while still maintaining membership. Taken together, these suggest
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
Publishing, Ltd. and permission has been granted for this version to appear in e-Publications@Marquette. Emerald Group
Publishing, Ltd. does not grant permission for this article to be further copied/distributed or hosted elsewhere without
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
accessed by following the link in the citation at the bottom of the page.
that the megachurch deliberately accommodates the varying needs of
an individual at different stages of their affiliation with the church.
Using the FACT 2000 survey, we show that the model's outcomes are
consistent with stylized facts suggested by the survey responses.
The remainder of the paper is organized as follows. Section II
provides an overview of trends in religious switching in the US as well
as a general overview of characteristics of megachurches. Section III
presents a model of quality signaling to explain how megachurches
successfully attract and retain seekers. Section IV evaluates the
model's predictions in light of survey responses comparing
megachurches to non‐megachurches and Section V concludes.
II. Successful churches, religious trends in the
US, and megachurches
Thumma et al. (2005), Bird (2007), and Thumma and Travis
(2007) represent the most comprehensive surveys of megachurches
and also allow for comparisons of megachurches to non‐
megachurches. Thumma and Travis (2007) estimate that there are
1,250 megachurches in a market of 335,000 congregations. This
number represents a 100 percent growth between 2000 and 2005.
Such growth is also continuing as they estimate that approximately
100 new megachurches are established each year.
This paper specifically focuses on the seeker‐oriented
megachurch. These have been on the rise since the 1990s and often
come to mind when megachurches are discussed. Rick Warren's
Saddleback Church is likely one of the best known examples of a
seeker‐oriented megachurch. These megachurches attempt to appeal
to individuals previously turned off by organized religion, trying to
connect with people who have abandoned or have remained outside of
a traditional faith. They often downplay denominational affiliation and
traditional religious services. Instead, they rely on a modern look (e.g.
a mall or college campus), have music driven by drums and electric
guitars, and frequently employ multimedia during a service.
Churches active in the market for followers will naturally
compete with one another to gain members. Results from both the
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
Publishing, Ltd. and permission has been granted for this version to appear in e-Publications@Marquette. Emerald Group
Publishing, Ltd. does not grant permission for this article to be further copied/distributed or hosted elsewhere without
the express permission from Emerald Group Publishing, Ltd..
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
accessed by following the link in the citation at the bottom of the page.
Pew study (2008) of the US religious landscape and Kosmin and
Keysar's (2006) study of the US religious marketplace find strong
evidence that individuals are employing their rights as consumers to
switch religious affiliation or even abandon religion altogether. The
Pew study finds that 28 percent of American adults have left the faith
in which they were raised for another faith or left religion
altogether[1]. Further, the survey finds that 16.1 percent of American
adults are unaffiliated with any religion. This proportion is even larger
for the younger demographic: for 18‐29 years olds, a full 25 percent
identify themselves as unaffiliated. Of all US adults claiming no
affiliation, the split between those that are “religious unaffiliated”
(people that say religion is somewhat or very important in their lives
yet have no affiliation) and “secular unaffiliated” (people that say
religion is not important in their lives) is nearly the same (5.8 percent
vs 6.3 percent).
Kosmin and Keysar (2006) further note that there is a
significant group of adults that identify with a church but do not
affiliate. They estimate that 81 percent of American adults identify
with a religious group, but just over one‐half live in households in
which someone is currently a member of a church. They also comment
that 30 percent of those who affiliate with a religion have no tie to a
congregation.
These surveys suggest that, in addition to those who declare
themselves as not belonging to any religion, there are many adults
who affiliate in name only, but have no ties to actually attending a
particular service. Individuals belonging to these groups (religious
unaffiliated and those having left a religion) are the key focus of
seeker‐oriented megachurches in their efforts to evangelize and grow.
Given the increased trend of religious switching and the pool of
people who are less connected to a religion, Thumma (1996) suggests
megachurches are well poised for growth. As churches exist in an
increasingly dynamic religious environment of empowered consumers,
the megachurch has formed itself as a flexible institution. Thumma
(1996) argues that megachurches are different than other spiritual
organizations in that they demonstrate a new pattern of
congregational life that changes with American society. In addition to
the characteristics mentioned before, megachurches typically offer
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
Publishing, Ltd. and permission has been granted for this version to appear in e-Publications@Marquette. Emerald Group
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
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multiple services, employ different styles of services to target various
interests in their congregation, and some even have multiple branches
to serve their members. Megachurch leaders often employ business
models and poll people to better understand what potential and actual
members want. As a religious organization these practices allow them
to excel at intentionally instituting procedures to help newcomers
become integrated in the church while not alienating members who
have deepened their affiliation with the church (Thumma and Travis,
2007).
While most are evangelical, many megachurches downplay their
denomination affiliation, at least while hosting activities that are
intended for new(er) attendees. As Warren (1995, p. 199) notes,
Saddleback is doctrinally and financially affiliated with the Southern
Baptist Convention (SBC). However, due to his concern that
widespread misperceptions about the SBC would inhibit seekers from
attending, he decided on a strategy to attract the seekers first and
only later educate them about the SBC. His argument is that after
seekers have found a good fit between their needs and what the
church offers they will be open to be educated about the SBC. Unlike
other churches, megachurches are organized to encourage growth by
allowing the new attendee to participate as a “free rider” with very
little or no expectation to tithe, volunteer time, or even learn about the
church's doctrines. However, Warren is careful to note that the free
riding cannot continue indefinitely. As he states, Saddleback Church
requires, “[…] a major commitment from those who want to join our
Church” (p. 54). Thus, once new attendees deepen their connection
with the church, significant expectations are placed on their behavior
in terms of tithing, volunteering, etc.
This approach provides an interesting case to consider in light of
past work which emphasizes the need to restrict free riding in religious
activities. Seeker‐oriented megachurches are appropriate to study in
this light since they intentionally vary their expectations of new
attendees relative to members of the megachurch. In an effort to
accommodate the perceived needs of seekers, they require very little
of new attendees and strategically offer activities (often in secular
based interests) to make it “easy” to attend. They do this while
eliciting significant dedication and sacrifice among members of the
church. As Thumma (1996) suggests, megachurches have directly
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
Publishing, Ltd. and permission has been granted for this version to appear in e-Publications@Marquette. Emerald Group
Publishing, Ltd. does not grant permission for this article to be further copied/distributed or hosted elsewhere without
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
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responded to changes in our culture and in a sense accommodate it
with a distinct and deliberate response in terms of how they are
organized, initiate programs, and influence member relations.
The approach taken by seeker‐oriented megachurches to attract
seekers often leads to a common misconception that megachurches
are a “low commitment” religion where members join with limited
contributions of time, effort, or money and that their level of
commitment never grows. It is true that lower ascriptive loyalties
combined with megachurches' efforts to provide a personalized
religious message have allowed them to reach out to seekers in order
to provide a church with low entry costs that speaks to individual
needs. In fact, many seeker‐oriented megachurches make significant
efforts along these lines to become the path by which these individuals
reconnect with God. However, though no commitment is initially
expected, at some point the church increases its expectations of those
who attend. It appears that this strategy ultimately works because
many attendees eventually become members, leading to the
megachurch growth discussed earlier. According to Thumma et al.
(2005), megachurches are among the most successful churches today
in attracting and retaining members, suggesting that they foster on‐
going commitment and involvement of their members.
If we consider the apparent strategy megachurches employ
when requiring no commitment early, but more after the individual is
connected to the church, it seems as though the megachurch is
drawing new members in by charging a low price to experience the
religious product, and then increasing the price after the individual
recognizes the quality of the religious product and deepens their
commitment to the church.
This process is clearly a different approach than that of
traditional churches seeking to minimize free riding by requiring
significant commitments from members throughout their association
with the church. Iannaccone (1992, 1994) makes the case that strict
churches are the ones most likely to grow and succeed in a
competitive marketplace. He argues that participating in a religion is
like a club good in that the utility an individual derives from
participating is a function of, among other things, the degree to which
others also participate. The public good aspect, however, of such an
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
Publishing, Ltd. and permission has been granted for this version to appear in e-Publications@Marquette. Emerald Group
Publishing, Ltd. does not grant permission for this article to be further copied/distributed or hosted elsewhere without
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
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activity can engender free riding. Thus, to minimize such behavior, a
strict church will attract committed members and thereby minimize the
free‐riding problem. Consequently, strict churches will be successful
while lax churches will weaken. Kosmin and Keysar's (2006) results
find some support for Iannaccone's predictions. On the one hand,
strict, or high cost, groups such as Born Again Christians and
Pentecostals, have indeed seen significant growth. On the other hand,
less strict or lower cost groups such as Presbyterians, United Churches
of Christ, and Methodists have declining memberships. Megachurches,
however, present an interesting case in that they seem to encourage
free riding, at least early in a person's association with the church, and
yet are growing.
III. A model of quality signaling to attract
seekers
Given the above discussion, we view a seeker‐oriented
megachurch as a unique religious organization whose strategy is to
market to the needs of religious refugees, or seekers, who are
dissatisfied with their previous religious affiliation. To target these
individuals, the seeker‐oriented megachurch must find a way to signal
their commitment to the quality, or fit, of their religious product in
order to attract a seeker to the service. Only by bringing seekers into
the megachurch, does the megachurch have the opportunity to
demonstrate that it can be a high‐quality fit with the seeker's tastes
and preferences and begin the process of deepening that individual's
relationship with the church.
It is precisely this challenge of signaling that provides our
motivation for characterizing the apparent pricing strategy of the
seeker‐oriented megachurch within a quality signaling model (for
extensive coverage of signaling, see Kreps and Sobel (1994)).
Specifically, we adapt Tirole's (1995) two‐period quality signaling
model to illustrate how a megachurch might distinguish itself from
non‐megachurches in its ability to offer a high‐quality fit experience
that is dissimilar from that of a competing organization that offers a
low‐quality fit for the seeker.
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
Publishing, Ltd. and permission has been granted for this version to appear in e-Publications@Marquette. Emerald Group
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
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We assume the seekers the megachurch hopes to attract are
religious refugees. That is, individuals who either have no religious
affiliation, or state an affiliation but do not attend religious services. In
this sense, we are not making a comment on the actual quality of
various churches or denominations. Instead, we use the notion of
quality or fit in the model to suggest a match between the seeker's
tastes and preferences and the religious product offered by a church
(or producer). We identify two qualities of fit of a religious good. The
high‐quality fit closely matches and satisfies the tastes and preferences
of some of these seekers while the low‐quality fit is not a match for
any of the seekers (of course the low‐quality fit religious good may
well satisfy the tastes and preferences of the non‐seekers, but this is
not the market segment we are examining).
The interaction between the church and the seeker is structured
such that the church charges a price for an individual to consume the
religious product in each period of the two‐period game (p1 and p2).
We interpret the “price” of a religious product along the lines of
Ekelund et al. (2006) as the full price of religion. This includes the time
required to attend, effort required to fulfill church expectations such as
service to others, and donations and tithing expected by the church.
The individual has the following utility function:
U = αs – pt if the individual attends the church, or
0 if the individual does not attend,
(1)
where t=1, 2, α is a taste parameter, s denotes the quality of fit, and
p is the full price. The taste parameter α is distributed over the
population of individuals with the cumulative distribution f(α). The
population is normalized at unity. For simplicity, we assume there are
no new entrants of consumers or producers in period 2.
There are two incumbent producers of distinct religious products
from which the seeker may choose. In this setting, the high‐quality fit
product, sh, is a match for some seekers, while the low‐quality fit
product, sl, not a match for any seeker. (We therefore implicitly set the
value of sl equal to zero.) The quality of fit of the religious product
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
Publishing, Ltd. and permission has been granted for this version to appear in e-Publications@Marquette. Emerald Group
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
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offered by each producer is known to the producer but not known to
the individual – prior to consuming the product in the first period – and
can only be learned by attending a church service and determining if
the religious good is a high‐quality fit or low‐quality fit. In this sense,
the religious product is an experience good.
Let γ denote the a priori probability that either product is a
match for the individual. Accordingly, γ is the proportion of repeats in
the second period at the high‐quality fit producer. Because the low‐
quality fit is not a match for any seeker, the low‐quality fit producer
does not have any individual that repeats in the second period. For
simplicity, only those who attend in period 1 can attend in period 2.
Thus, in the second period when quality is known to seekers, the high‐
quality fit producer will provide a service to a proportion, γ, of those
who attend in period one, while the low‐quality church will not. The
high‐ and low‐quality fit products are produced at different unit costs
denoted as ch and cl, respectively. We make two assumptions on costs.
First, it is assumed that the unit cost of producing the high‐quality fit
product is greater than that of the low‐quality fit product, 𝑐ℎ ≥ 𝑐𝑙 .
Second, it is economically efficient to produce that high quality good,
and so 𝛼𝑠ℎ ≥ 𝑐ℎ .
For simplicity, the church and the individual have the same
discount rate, δ, which is used to discount the second‐period “profits”
of the high‐quality fit producer. It follows that the total discounted
profit of the high‐quality fit producer is:
Πℎ = (𝑝1 – 𝑐ℎ ) + 𝛾𝛿(𝑝2 − 𝑐ℎ ) ≥ 0.
(2)
The discounted profit of the high‐quality fit producer depends not only
on costs of production and the discount rate, but also the prices
charged in each period and the proportion of satisfied or repeat
individuals. The first‐period price is important because the seeker‐
oriented church needs to attract potential members in period one so
they might learn about the quality of the product. It follows that if the
low‐quality fit producer mimics the first‐period price strategy of the
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
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high‐quality fit producer and charges price p1, the low‐quality fit
producer's profit, which occurs in the first period only, is equal to:
∏𝑙 = 𝑝1 – 𝑐𝑙 ≥ 0.
(3)
Equation (3) represents the cost advantage to the low‐quality fit
producer. To ensure that the low‐quality fit producer does not profit at
the high‐quality fit producer's expense, the high‐quality producer
would ensure in period 1 that 𝑝1 ≤ 𝑐𝑙 . Subtracting equation (3) from
equation (2) therefore yields the constraint faced by the high‐quality fit
producer:
∏ℎ = 𝛾𝛿(𝑝2 − 𝑐ℎ ) – (𝑐ℎ – 𝑐𝑙 ) ≥ 0.
(4)
Two important points emerge from equation (4). First, in words, in
order for the high‐quality fit producer to use the first‐period price as a
signaling mechanism, it must be that the discounted profits from
repeat individuals exceeds the cost differential[2]. Second, it follows
that for the inequality to hold, it must be that the second‐period full‐
information price that the profit‐maximizing high‐quality fit producer
would charge, αsh, is greater than unit cost, ch.
In light of the above constraints, the optimal strategy for the
high quality church is to price the religious product it offers equal to
the low quality church's cost in the first period. Under these
circumstances, a low quality church would not mimic a high quality
church because it could not earn a positive profit doing so. Thus, the
high quality church can signal its commitment to offer a high‐quality fit
product and thereby separate itself from a low quality church by
charging a low quality price in the first period (p1=cl).
The high quality church could recoup (at least) its first period
loss in the second period by charging a sufficiently high price. In the
second period, the profit‐maximizer can charge a full‐information price
equal to αsh. The first component of equation (4), γδ (p2−ch), implies
p2=αsh≥ch≥cl = p1, and, therefore, period 2 price must be higher than
International Journal of Social Economics, Vol 39, No. 5 (March 2012): pg. 357-372. DOI. This article is © Emerald Group
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NOT THE PUBLISHED VERSION; this is the author’s final, peer-reviewed manuscript. The published version may be
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period 1 price. In other words, period 1 price is an introductory price
as it is lower than the full‐information price charged in the second
period. Thus, the church will expect its attendees to pay more in the
second period when the returning attendee has discovered that the
church provides a good fit. This may take the form of higher
expectations of monetary offerings, higher expectations of
participation, and higher expectations of personal practices (e.g.
behaving in a manner consistent with church teachings). Note that the
quality of the product, sh, is an important determinant of the price
difference between period 1 and period 2 and, therefore, profit as well.
Hence, the profit‐maximizing producer does not scrimp on quality in
the second period.
IV. Empirical evidence
The model suggests that megachurches succeed in attracting
and retaining seekers by requiring little of them early in their
association with the church, but after the high quality (good fit) of
their services is experienced, the church can expect more of the
attendees. Thus, the price a seeker‐oriented megachurch charges is
low initially, but then rises after the quality of the service is known[3].
Given that megachurches have only recently garnered
significant attention among academics, empirical researchers have
been hindered by a shortage of data. The data employed in this study
come from the Faith Communities Today 2000 (FACT 2000) survey.
The data were made available by the Association of Religion Data
archives, www.TheArda.com, and were collected by Roozen (2000)[4].
Given the importance of the FACT 2000 survey, we briefly
describe the survey before we evaluate the empirical results. The FACT
2000 survey is the largest survey of congregations in the US. It is also
allows for the first systematic study of megachurches. FACT 2000
allows researchers to investigate a variety of congregational
characteristics including their number and style of services,
programming efforts, and many aspects of congregational life. Bird
(2007) notes that the survey measures 280 variables, and the
responses represent 41 denominations and faith groups
(approximately 90 percent of all US congregations and faiths). The
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survey was mailed and averaged over a 50 percent return rate,
resulting in approximately 14,000 returned surveys. The survey was
completed by a “key informant”. Each institution was free to choose
who this person would be, but was in almost all cases the senior
religious figure, or in their absence, the senior lay leader.
Our data analysis consists of comparing the responses of
megachurches to non‐megachurches on a number of issues related to
our hypotheses on pricing. To conduct the analysis, we first separate
megachurches from non‐megachurches. We apply the definition of
megachurches being Protestant churches with weekly attendees of
2,000 or more. FACT 2000 classifies denominations as belonging to
one of the following categories: Liberal Protestant, Moderate
Protestant, Evangelical Protestant, Historic Black, Catholic and
Orthodox, or other. Our megachurch subset thus includes Liberal,
Moderate, and Evangelical Protestant congregations with 2,000 or
more attendees. The non‐megachurch sample includes Catholic and
Orthodox, Historic Black churches, and “other”[5]. Of these returns,
the survey received 120 usable responses from megachurches and
13,259 usable responses from non‐megachurches.
To examine the change in prices, it simplifies our analysis to
know that megachurches essentially offer services to non‐members at
close to a zero price. Warren (1995) notes that as he established
Saddleback, during offerings he stated that the offering was only
expected of members of the church family. Non‐members were and
are not expected to give. Both Warren (1995) and Thumma and Travis
(2007) mention that seeker‐oriented megachurches understand
seekers want anonymity and pastors wish to provide the required
anonymity. Naturally, megachurches would then not make
requirements of additional time and effort of seekers getting
acquainted with the church early in their affiliation. Thus, what
remains to add empirical content to our model is to consider the
available data to investigate other measurable ways in which the
megachurch can reduce the whole price of affiliation for new or non‐
members and then raise the price as a person's affiliation with the
megachurch deepens.
As mentioned above, the FACT 2000 survey contains questions
regarding many aspects of the congregation's life. Some areas
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examined include the number of services offered at various times, the
variety of styles of services, the types of group activities offered by the
church, the effort required to get members to volunteer, and outreach
programs that exist. Each of these series of questions may lend
themselves to considering the price of affiliation via the time or effort
that is required to participate. Thus, we will examine differences
between responses from megachurches and non‐megachurches to gain
insight into whether the data support the model.
Evidence of low prices to attract seekers
FACT 2000 investigates three questions, in particular, that we
argue reflect evidence of low prices to bring seekers in. The questions
ask:
1. About the number of services offered at different times during a
weekend.
2. The variety of styles of services.
3. The types of group activities that exist in which attendees may
participate.
We maintain that a church that offers more services makes it
cheaper for attendance since the potential member can find the time
that is most accommodating to her schedule. In this way the full price
of attendance is lowered by providing flexibility to the individual,
thereby reducing the opportunity cost of attendance. The FACT 2000
questionnaire asks how many services are offered on Friday, Saturday,
Sunday morning, and Sunday afternoon. We calculate difference of
means tests to examine what the differences between megachurches
and non‐megachurches. The results are illustrated in Table I.
The results show that for Saturday, Sunday morning, and Sunday
afternoon, megachurches offer statistically significantly more services
than non‐megachurches. Thus, we conclude that for these three time
spans, megachurches succeed in lowering the price of religious
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participation and make it easier for seekers to join the megachurch
than the non‐megachurch.
Next, we suggest a church that varies the style of service also
reduces the price of attendance as a potential member can seek out
the style and social group for which they are most comfortable. We
see both of these aspects as a reduction in the “price” of attendance
along the lines of Miller (2002, p. 445), who analyses the strategies of
various religions and concludes that if a church reduces the demands
placed upon potential customers it can “ease a potential customer into
a religious organization”. He uses as Jewish Community Centers as an
example of how an organization may secular activities as “non‐
threatening entry points” for disaffiliated Jews. Various styles of
services and various secular‐activity groups will appeal to different age
groups, ethnicities, and lifestyles. Ease of entry points reduces the
demands on potential members and thus reduces the price of
attendance.
FACT 2000 asks a question for churches that hold more than
one service per weekend, how varied or similar they are. The
responses are coded as 1 being very similar, 2 being somewhat
different, and 3 being a very different in style. Table II reports the
comparison of results across churches.
The results again suggest that megachurches are able to attract
seekers through lower prices of attendance via a larger range of styles
that are applied to the larger number of services offered.
Finally, the church that offers group activities centered around a
larger variety of interests makes it cheaper to participate because the
larger the variety, the easier it is for a potential member to link a
hobby or personal interest to her church life. Moreover, the more of
these groups that are centered on activities that are typically secular
based, the lower the price of participation the seeker will perceive. For
example, if a megachurch member organizes a running club and
invites a seeker (assumed to be a person who enjoys running) to run,
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the cost of continued affiliation seems relatively low since the seeker
enjoys running anyhow. Table III illustrates the percent of churches
that offer various types of groups that would typically be considered
based in a secular interest.
We see that for each and every activity, a larger proportion of
megachurches provide the group activity than non‐megachurches, and
that the difference is highly statistically significant. Further, the
difference is arithmetically particularly large for secularly based
activities such fitness activities (a 59 percent difference) and sports
teams (a 57 percent difference).
An argument can be made that these groups are a function of a
supply side effect suggesting a larger church can offer more groups
than a small church, and that these differences are not an outgrowth
of a deliberate strategy. To investigate this, we would ideally like to
consider the number of groups that this sample of megachurches
offered at times when they had fewer attendees (were not yet
megachurches). Unfortunately, that is not possible. As a second best,
we examined whether, in our sample, the megachurches were liberal,
moderate, or evangelical. Our sample was comprised of 11 liberal, five
moderate, and 104 evangelical megachurches. Since, as Warren
(1995) makes very clear, groups were employed to draw religious
refugees into the church and grow the church, we view the use of
small groups as a process to help smaller churches grow into
megachurches.
Given that 87 percent of our megachurches are evangelical in
our sample, we make the assumption that the many of the smaller
evangelical churches in our sample are using groups to grow their
church. In an effort to test the supply side theory we compare
evangelical churches to non‐evangelical churches in four market sizes.
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We define the “mini‐market” as churches with a weekly attendance of
200 or fewer; “small market” as churches with attendance greater
than 200 and up to and including 500; “medium market” as churches
with attendance greater than 500 and up to and including 1,000; and
“large market” as churches with attendance greater than 1,000 and up
to 2,000.
When we compare the proportions of evangelical to non‐
evangelical churches offering these groups, the turning point comes at
the small market. Once the church experiences attendance rates
between 200 and 500 weekly attendees, the evangelical churches have
clearly established the use of small groups, in particular groups based
in secular interests as a priority. Thus, it seems as though the supply
side argument is viable when comparing churches with 200 or fewer
attendees to larger churches, but is not relevant to comparing
megachurches to the churches with greater than 200 attendees.
Taken together, these data may suggest seeker‐oriented
megachurches have found a strategy to lower the full price of
participation for new attendees. This may, in fact be one reason that
many see megachurches are “religion‐lite”, or a spectator religion.
Thumma and Travis (2007), however, argue that this is not the case.
They contend that members of megachurches actually pay a high full
price for membership. Ease of entry remains for members, but the fill
price of participation may rise through other costs, requirements, and
commitments.
Evidence of higher prices with deepened affiliation
The model outlined above predicts that, subsequent to a seeker
discovering a good fit, the church will raise its price. Though data do
not exist to make precise comparisons of prices and costs, FACT 2000
does lend itself to finding evidence of whether a megachurch does
increase the full price of increased affiliation with the church.
Specifically, the survey asks three questions that may be employed to
test for higher prices of participation after time has passed and
affiliation has deepened. The questions ask:
1. About the difficulty in getting people to volunteer.
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2. About the expectations of members' personal practices outside of
church and general strictness.
3. About the existence of community outreach programs.
Following Bird (2007), we argue that all these activities would
be most relevant to attendees who are further in their process of
affiliation, or in the context of our model, are individuals who already
purchased the religious service at a “cheap” price, found a good fit,
and are returning to the megachurch. As their affiliation continues,
they become more involved and through time or effort and therefore
pay a higher price for the religious good.
The first question asks the respondent to characterize the ease
or difficulty in motivating individuals to take leadership roles. Possible
responses are that their congregation does not have any problem
getting people to accept volunteer leadership roles (coded 1), that
recruiting volunteers is a continual challenge, but that they do
eventually find enough people (response coded 2), or that they cannot
find enough people to volunteer (response coded 3). Table IV provides
the results.
Given that a lower number corresponds to greater ease of recruitment,
the megachurches are able to recruit volunteers easier than non‐
megachurches. Thus, the price of affiliation rises given the additional
time the attendee volunteers.
The second question asks how much a congregation can expect
of an individual's behavior outside of church services (i.e. in their
home and personal practices). The five variables examined are
personal prayer/scripture studies/devotions/other spiritual practices,
family devotions, fasting, and abstaining from pre‐marital sex. The
scores range from 1, associated with “Not at all”, to 5, associated with
“A Great deal”. Table V provides the results of the difference of means
tests.
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The results suggest that megachurches do have statistically
significantly higher expectations of home and personal practices in
each of these categories. As a result, it can be inferred that the church
is again raising the price for its more deeply affiliated members by
expecting more of their behavior outside of church.
Further, the questionnaire also asks which of the following
statements best describes the congregation. The choices are:
• Our congregation has only implicit/vague expectations for members
that are seldom, if ever, enforced (coded 1).
• Our congregation has fairly clear expectations for members, but the
enforcement of these expectations is not very strict (coded 2).
• Our congregation has explicit/definite expectations for members that
are strictly enforced (coded 3).
The mean for the megachurch is 1.97 vs 1.78 for the non‐megachurch
(p‐value of 0.014). Thus, again, we see that megachurches do expect
more of their members than non‐megachurches.
Another manifestation of a higher price of membership may be
to engage in group activities that act as an outreach to the
community. For example, volunteering at a soup kitchen, providing
home health services, or engaging in prison ministry. We contend that
participation in such groups demonstrates an individual's willingness to
pay a higher price for membership to the church. The survey collected
information on whether the church itself, or in conjunction with
another organization provided groups across 16 different outreach
programs. The responses were coded “1” for “No program”, and “2” for
“Yes program”. The results are provided in Table VI.
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The results indicate that across every outreach program, a larger
proportion of megachurches provide the program than do non‐
megachurches. Consequently, we have additional evidence of
increased price of membership after individuals discover a good fit
between themselves and the megachurch.
Analysis of the FACT 2000 survey results suggests that
megachurches are, in part, successfully growing by bringing seekers
into the church via a low initial price. This low price takes many forms.
The megachurch offers a variety of services both in number and style,
making it easier to for seekers to enter the church. Moreover, they
offer church groups, many of which are based on otherwise secular
interests. This, too, reduces the demands on a new attendee to
discover whether the megachurch is a good fit. The data also show
that for those that continue their affiliation having discovered a good
fit, the megachurch demands more. The megachurch is able to
demand more in terms of members taking on leadership roles, holding
themselves to strict personal standards, and participating in
community outreach groups[6].
V. Conclusion
Megachurches continue to grow in the marketplace of the US
religion as Americans increasingly assert their ability to switch
religions. Megachurches are significantly different from more
established and traditional churches in that they often have a flexible
and modern look, downplay denominational affiliation, and employ
otherwise secular activities in their programming. They also encourage
new attendees to enjoy their services without significant commitment
early in their affiliation. Their growth, thus, seems to contradict a
significant amount of the literature that characterizes strict and high
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commitment religions as those that will be successful and low
commitment religions as those that will atrophy.
This paper provides an economic model of pricing and quality
signaling to explain the success of megachurches in attracting and
retaining members. Megachurches employ a distinct strategy of
reducing the full price of affiliation by providing different avenues that
serve to ease a seeker's entry to the church, but then raise the full
price after the seeker chooses to become a member. Survey results
from FACT 2000 illustrate that megachurches provide more services
and a greater variety of styles of services than non‐megachurches,
both of which serve to reduce the full price of attendance. They further
ease the entry by offering more church organized activities associated
with secular interests than non‐megachurches do. The model
demonstrates that as seekers respond to the lower full price of
attendance, a portion of these seekers will find a good fit between
their needs and what the megachurch offers. For those that continue
their affiliation and become members, the megachurch can expect
heightened participation and raise the full price of membership. The
data show that, compared to members of non‐megachurches,
members of megachurches perceive a higher required expectation of
personal practices at home which serve to raise the full price of
membership. Moreover, a larger proportion of megachurch members
participate in outreach programs than non‐megachurch members. This
also indicates an increased full price of membership. Last,
megachurches have fewer difficulties of recruiting volunteers than non‐
megachurches, suggesting that the megachurch members are willing
to spend more of their time involved with the church, and
consequently pay a higher full price of membership. Taken together,
the data reflect that megachurches initially reduce the full price of
membership to bring seekers to the church, but are later able to
increase the full price of membership for those that have found a good
fit between their needs and what the megachurch offers.
Future work in this area would benefit from repeating surveys
like the FACT survey with the same churches over time and allowing
for panel analysis. Further, surveying both the key informant as well
as members of the church would allow for a better understanding of
church strategies for growth as well as members' perceived needs and
how the two forces interact. Last, such survey work would also help
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researches better understand which members become a part of the
committed core of a church, as discussed in Warren (1995).
Notes
If we allow for a switch from one form of Protestantism to another,
this statistic rises to 44 percent.
If 𝛱ℎ = 𝛾𝛿(𝑝2 ‐ 𝑐ℎ ) − (𝑐ℎ ‐ 𝑐𝑙 ) < 0, the high‐quality producer would have
an incentive to produce the low‐quality fit product, would always
charge cl and, therefore, could not use price as a signal of
quality and commitment.
It would be ideal to test the model by comparing prices of different
services to costs of providing services at megachurches and
non‐megachurches. Given that no such data are publicly
available, we focus on data that allow us to infer relative prices
of attending megachurches and non‐megachurches.
We are indebted to Warren Bird whose 2007 PhD thesis made us
aware of the data set and who also applied similar tests to some
of these questions. Our results support and extend his results.
While it may be argued that Historic Black churches may be treated as
Protestant, and thus potentially be included in our megachurch
sub‐sample, we follow Coreno (2002) and Welch et al. (2004),
who argue for a separate classification for Black Protestant
denominations because of the unique historical experience of
black denominations.
It may also be of interest to compare megachurches to just other
Protestant churches, as one review suggested. When we do so,
the analysis presented in this section is fully supported with the
following exceptions. In Table I, compared to other Protestant
churches, megachurches no longer offer more of services on
Fridays or Sunday afternoons. Further, the increased style of
services offered by megachurches, as referenced in Table II, is
no longer statistically significantly greater than those offered by
other Protestant churches.
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